Headlines of Interest

One thought on “Headlines of Interest”

1. I’m a yield hog so I took a quick look at the performance of PFFL, the UBS double leveraged preferred ETN, which has a giant double-digit yield, and is a monthly payer too, versus the performance of its component ETFs, PFF and PGX.

   PFF has a year to date price return of -5.9% and a TTM Yield of 7.3%. PFF is a popular preferred ETF and one of the components of PFFL.

   PGX has a year to date price return of -7.5% and a TTM Yield of 7.0%. PGX is a popular preferred ETF and the other component of PFFL.

   PFFL has a year to date price return of -20.0% and a TTM Yield of +16.5%. So PFFL looks more underwater compared to its competitors.

   The divvies here are pretty big so I took a deeper look and ran PFF, PGX, and PFFL against each other YTD with divvies reinvested. PFF and PGX were positive YTD, PFFL was negative YTD, with PFFL’s max draw down about twice PFF and PGX.

   2022 was a bad year, so I ran them 2022 to 2023-YTD. Pretty much of a dead heat, with PFFL still in third place, but with PFFL’s max draw down still about twice PFF and PGX. FYI – Same results for PFFL versus a 50-50 blend.

   I don’t know anything about the workings of PFFL but one article suggested PFFL has a drag from tracking costs and interest costs which are dinged against NAV and not charged against divvies.

   Conclusion: PFFL has a tempting yield but it seems you can do as well or better with the underlying ETFs with less draw down risk. Just my opinion. DYODD

   No position in any of these issues. Long preferreds.

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